What are the Benefits of Insurance to Farmers?

Aug 29, 2020 | Business Insurance

Farms And The Benefits Of Insurance To Farmers Farmers

Farms are one of the most important sectors in the country. They provide food for Americans and for people abroad. Running a farm requires a lot of hard work and also involves high risks. In order to protect your farm, you need insurance to cover possible damages.

Some facts about farms in the United States:

  • There are 2.2 million farms in America and they employ more than 20 million American workers.
  • Most farms are operated by individuals or family corporations
  • About 30% of farms are for export
  • The US exported $115 billion worth of agricultural products in 2010

Liability Insurance

One of the benefits of insurance to farmers is Liability insurance. It is often called third-party insurance, protects the insured from legal liabilities and insurance policy claims. This prevents third-party claims. These claims may be paid to someone other than the insured who has suffered a loss. Intentional damage and contractual obligation aren’t protected. The insurer must cover the insured after a claim.

Liability insurance has two key points. First, pay injured parties on your behalf. Second, defend against lawsuits. Farming is a business, thus you need liability insurance. The insured must be legally liable for the damage for the insurer to pay.


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Some important things to consider when filing claims

Negligence

To claim damages for negligence, the injured party must show that the insured was responsible for their care, breached that obligation, caused damages, and the amount of those damages. When an insured doesn’t act responsibly or appropriately, their behavior is assessed. Ignorance, honest mistakes, and injuries shouldn’t impact policyholders. It’s considered that those who engage in dangerous activities recognize the hazards.

Farm employees

Businesses who hire workers increase their potential liability. A farm may be responsible for the acts or possible injuries of their employees. They can also be liable to damages to third parties caused by their employees so it is important that business owners should give proper instructions to their workers.

Rented ground

Renters are responsible for their own negligence. The owner of the land is liable for their lands if something occurred.

Fence law

Owners of livestock must be very careful in handling their livestock and prevent them from escaping and causing damage. If their animals escape and cause harm, the business owners are responsible. Some of the animals that can cause extreme damage are bulls, stallions, bucks, and boars.

Agritourism

Agritourism has become a popular option for farmers to make additional income. Mazes, hayrides, farm tours, special events, and weddings are among the few examples of agritourism. Farmers should make sure to consider getting additional liability coverage to protect their business.


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Liability Insurance Inclusions

Part of the benefits of insurance to farmers, you can purchase a business insurance policy that can cover your farmer liability insurance needs. Some of its coverage includes the following:

General or Premises Liability Insurance

General Liability Insurance helps when someone sustains an injury at your farm or a property on your farm . This could help you cover the costs of their medical expenses. If you often hold tours for your farms then this insurance can help you. One area of premise liability that deserves special attention is agritourism. Activities that go along with agritourism usually have no coverage by your farm policy. This particular coverage can give you protection for most types of agritourism.

Product liability insurance

The insurance can help you if your products cause illness or injury to people. 

Worker’s Compensation Insurance

This is required by our law. However, this depends on your state regulations and the number of workers that you have. If one of your workers is injured while working for your farm, then this can cover the costs of the medical expenses.

Commercial vehicle liability insurance

You can insure all your farm vehicles in one commercial vehicle insurance policy. This can protect you from liability risks if one of your drivers for your vehicles injures a person or damages a property.

Non-owned or for-hire vehicle liability insurance

The insurance can also protect you when your workers use their own vehicles in carrying their jobs for your farm such as someone transporting your farm goods. Your farm can be liable for damages if your worker has an accident while doing the job while driving a non-owned or for-hire farm vehicle as they work.

Business Property and Asset Insurance

Farmers also need business property and asset insurance. Another one of the benefits of insurance to farmers provides coverage for loss or damage to your farm’s property and assets. Among the following are the options you might want to consider: This is also a part of the benefits of insurance to farmers.

Farm equipment insurance

You need to be sure that you have enough coverage if a fire happens in your farm or a falling object damages your expensive equipment such as tractors, threshers, and combines. A natural disaster might also damage your farm. This insurance can help you replace them without suffering a huge financial loss. This is one of the very important benefits of insurance to farmers.

Homeowners insurance

Most of the time, farm insurance policies let farmers insure their own homes on their business insurance policies. This can help you save money on your home and personal property insurance.

Farm structure insurance

Your insurance can cover your barns, silos, pens, chutes, daily parlors, confinement policies, and corral fencing. Make sure to purchase enough coverage for these structures so you would not have problems and have the necessary funds when you face a natural disaster and in order to rebuild them.

Livestock insurance

If your farm has livestock such as cows, sheep, goats, or swine, make sure to purchase insurance coverage so if they die due to accidental shooting, electrocution, or due to severe weather during transport, you can replace them.

Crop insurance

The insurance covers agricultural loss from natural catastrophes, price fluctuations, pests, and illnesses. You may pick which crops to cover, insurance products, and degree of coverage. Crop insurance is the government’s major endeavor to protect farmers. You may pick the amount of coverage nationally. Crop insurance coverage is plentiful. Major crops may have yield protection. This is another important benefit of insurance to farmers.

Continuation of income insurance or business income insurance

If you have to halt agricultural activities, the insurance will continue to pay your expenses and personnel. This may happen if a barn in your farm burns down or if marketable animals die. Stop earning until additional animals are raised. Property insurance covers animal loss and revenue flow.

Not all agricultural companies require insurance. A company with no employees and where the owner performs all the work doesn’t require worker’s comp or employee dishonesty insurance.

Federal programs help you handle additional risks. Non-insured Disaster Assistance Program, Agricultural Risk Coverage, Price Loss Coverage, and Dairy Margin Coverage might influence your farms.


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Non-insured Disaster Assistance Program

The Non-insured Disaster Assistance Program helps uninsured farmers. This costs less than a crop acre. This reduces financial losses when natural catastrophes reduce manufacturing. This covers 50%-65% of the average market price in 5% increments. Local USDA Farm Service Agency offices provide this program. You qualify if your three-year average AGI was $900,000 or less. Pay $325 per crop per county for this coverage. Basic coverage payments are capped at $125,000 per crop year and $300,000 per person or corporation. Beginner farmers or those with low finances might have the service charge and premium waived.

Agricultural Risk Coverage and Price Loss Coverage

Both Agricultural Risk Coverage and Price Loss Coverage are programs authorized under the Farm Bill. Farmers must choose between participating in these two programs. These two programs give you a choice of county or farm-level revenue coverage. If the Agricultural Risk Coverage program is chosen, the farm is not allowed for the Supplemental Coverage Option under the crop insurance.

Daily Margin Coverage Program

Dairy farmers may opt into the Dairy Margin Coverage Program. This protects the producer when the all-milk price and average feed cost fall below a specific threshold. This can also provide catastrophic and buy-up coverage. When the national dairy production margin is below $4 per hundredweight, catastrophic coverage is applied.


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Other Types Of Insurance Needed By Farmers

Health and Life Insurance

You may also need health and life insurance for yourself and family members or as part of a benefits package for your employees or workers. You may also need business interruption insurance, employee dishonesty insurance, and key employee insurance. Insurance can be so expensive. You also need to assess the risks you may encounter in your business and also assess if you can survive and continue with your business when you also encounter a loss. Offering benefits such as life and health insurance can attract your employees to stay in your business.

Dental Insurance

Coronary and dental health are directly connected. You can stay healthy if you take care of both your heart and teeth.

Disability Insurance

This kind of insurance can help you in case you meet with an accident during work and you get disabled. This insurance will give you enough income even if you cannot go to work.

Employee Dishonesty Insurance

Employee Dishonesty Insurance covers organizations with workers who handle checkbooks and records. This sort of insurance covers the loss if an employee conceals marketing money. To safeguard your firm, you may also wish to insure your financial workers.


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Key Employee Insurance

Key Employee Insurance covers a business’s most significant employee. The insurance will pay out when the key employee leaves. Farm managers are crucial employees. If the manager can’t work, the firm will suffer. This insurance covers the cost of hiring another specialist.

Conclusion

The biggest benefit of insurance to farmers is that it protects your farm or ranch from claims arising from both man-made and natural disasters. Make sure your farm and ranch are protected. Call or text Advantage Insurance Solutions, Inc. toll-free at (800) 321-0258 today!

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